Due to not passing of the benefits of reduced goods and services tax (GST) rates to consumers, the FMCG firm ITC and Baba Ramdev's Patanjali Ayurveda have come under the scanner of profiteering watchdog and have received notice from Directorate General of Anti Profiteering (DGAP). The Goods and Services Tax Council has cut GST rates to 18% from 28% in November 2017 for 178 products including detergents, shampoos and beauty products. For withholding benefits of GST rate reduction on its FMCG products, ITC has received enquiries from the DGAP and it was providing necessary information to the authorities.
According to the report, DGAP has indicated Patanjali Ayurveda earned nearly Rs 176-crore profit on various FMCG products till August 2018. The probe into profiteering by Baba Ramdev-led Patanjali is being extended till March 2019, the report said. The tax authorities had alleged that the US consumer goods maker Procter & Gamble did not pass on Rs 250 crore in tax benefits which were meant to have gone to its customers. In July 2018, the GST Council had exempted sanitary napkins from the levy which stood at 12%. P&G sells the Whisper brand of sanitary napkins. Johnson & Johnson (J&J), which sells Stayfree brand of sanitary napkins, too has come under the scanner of profiteering watchdog.
A J&J spokeswoman said "The matter is currently under adjudication and we continue to work closely with the authorities to address any queries that they may have on the subject". Samsung is being probed for not passing rate cut benefits in case of television sets. In its December meeting, the GST Council had reduced rates on monitors and TV sets of up to 32 inches from 28 percent to 18 percent. Meanwhile, a spokesperson for Samsung said the firm reduced its sales price according to GST reduction on January 1,2019. We are cooperating with DGAP (Directorate General of Anti Profiteering) on this matter," the company said in a statement.